UAE Central Bank inks $1.36 billion currency swap deal with Egypt
Shafaq News/ The Central Bank of the United Arab Emirates (UAE) and the Central Bank of Egypt have entered into a bilateral currency swap agreement, signaling a significant step towards enhancing economic ties between the two nations.
The size of this agreement ranges between Dh5 billion ($1.36 billion) and 42 billion Egyptian pounds, as confirmed by the UAE central bank on Thursday.
A currency swap agreement facilitates the exchange of currencies between two parties, involving swapping principal and interest payments on a loan in one currency for an equivalent loan in another.
Khaled Balama, the Governor of the UAE central bank, underscored the importance of this agreement, stating, "This reflects the strong relationship between the two countries and serves as an opportunity to promote cooperation and develop our respective economic and financial markets." He further emphasized the commitment of both countries' leadership to expanding collaboration across various sectors.
Balama stated, "In line with the efforts of the UAE and Egypt's leadership to collaborate more broadly across multiple areas, the CBUAE (Central Bank of the UAE) is keen to deepen its cooperation with the CBE (Central Bank of Egypt) to achieve common interests, positively impact trade, investment, and financial sectors, and enhance financial stability."
The UAE and Egypt share a robust trade and economic relationship, with the UAE being the largest international investor in Egypt, with investments exceeding Dh55 billion. Over the past two decades, non-oil trade between the two countries has witnessed remarkable growth, totaling more than Dh247.68 billion, representing a significant increase since 2000.
In May 2022, the UAE, Egypt, and Jordan announced the signing of an industrial partnership agreement to foster sustainable growth and create a $10 billion investment fund designed to accelerate partnerships across key sectors. These sectors include petrochemicals, metals, minerals, textiles, pharmaceuticals, and agriculture.
Several UAE companies, including Emaar Properties and Aldar Properties, have invested substantially in Egypt, further strengthening economic ties between the nations.
Governor Hassan Abdalla of Egypt's central bank expressed confidence in the agreement's potential to enhance cooperation between both countries' financial sectors in their respective currencies. This agreement follows a similar accord signed by the UAE central bank with its Turkish counterpart to enhance trade and investment relations.